Condemned Property's Value Is Determined Singly---Not As Combined With Other Properties

Tuesday, November 13, 2018 2:23 am
November 2018 - Volume 46 Number 11

The value of a completed natural gas reservoir that would span numerous properties combined via eminent domain can’t be used to determine the just compensation for condemning any one of those properties on its own.

Facts: This is a case about how to value property that’s worth a whole lot in combination with other properties---and not much when considered alone.

Stephens Production Company (Stephens) sought to condemn easements in order to complete an underground natural gas storage facility. The Oklahoma Underground Storage of Gas statute gives any public utility, like Stephens, the power to “condemn for its use for the underground storage of natural gas any subsurface substratum or formation in any land which the [Oklahoma Corporation] Commission shall have found to be suitable and in the public interest for the underground storage of natural gas.” 52 O.S. 2011 § 36.3.

The Commission approved Stephens’ request to condemn property for storing natural gas in a “reservoir” of about 900 acres of a “well-defined porous limestone of an oval shape” that is about 6,000 feet below ground. The reservoir doesn’t contain any economically recoverable gas or oil. Instead of ex[..]